How to run a scam

As big-time fraudster Bernie Madoff proved, all great scams start with one really good line of BS

Pick a scam
The Ponzi scheme uses cash from new investors to pay dividends to old investors, so it looks like profits are soaring. In a pyramid scheme, every “investor” lures a new batch of suckers for a cut of all future entry fees. A multilevel-marketing scam has “reps” sell a product, but entices them with commissions on sales of those they recruit.

Work an angle
Whenever Madoff was asked about his high profits (about 10 per cent a year), he cited “split-strike conversions”, a system he couldn’t discuss. “There’s usually some cryptic angle,” notes fraud expert Greg Hays. Scams often push products with secret compounds that, say, triple muscle mass, hair thickness and brain cells.

Spread the word
Any huckster worth his salt (or someone else’s) relies on word of mouth. “They have to get people singing their praises early,” Hays says. Pyramid promoters cut cheques regularly, and multilevel marketers shell out big “bonuses” for recruiting new victims.

Run for the border
By its 11thth round, a pyramid that began with six takers needs 362,797,056 more. “There aren’t enough people to sustain these schemes,” Hays says. At this point, you should skip to a country without extradition laws. We hear Vanuatu is lovely this time of the year.